Cheaper loans for teachers as sacco lowers interest rate

Friday November 9 2012

The Teachers Savings and Credit Co-operative, Umwalimu Sacco, has reduced its lending interest rate by three per cent to encourage members to apply for loans.

The sacco has reduced its lending rate from 14 per cent to 11 per cent following government’s intervention to make loans affordable to teachers.

A Cabinet meeting last week resolved to support the sacco and approved Rwf5 billion grant to boost its capital base.

The sacco, which has 60,000 members and a capital base estimated at Rwf40 billion, lends Rwf14 billion per year, according to data available.

Uplift social status of teachers

The sacco’s director-general, Joseph Museruka, said the government pledged its support in a bid to uplift the social status of teachers, mainly those in public schools.

“It was towards the end of last year that the government decided to increase their salary by 10 per cent, now they are being facilitated to access cheaper loans,” he said.

Mr Museruka added that 18 per cent of the Rwf5 billion added to the sacco’s coffers would help teachers to access mortgages with a 15-year repayment period instead of five.

The special credit facility will only benefit teachers in public schools and their counterparts in private schools, who will be charged 14 per cent interest, he added.

Need to strengthen saccos

While presenting this year’s budget statement in June, Finance Minister John Rwangombwa underscored the need to strengthen saccos, saying they had become an important instrument of economic and social transformation.

He also announced that the government had allocated Rwf2.6 billion to provide technical assistance to saccos.

Last year, the government launched a programme of donating one cow per teacher countrywide in order to motivate them.

Ministry of Education reports indicate that 257,000 cows are given to teachers every year. The government expects to donated 700,000 cows by 2014.

Motivated by government’s initiatives

Catherine Uzamushaka, a beneficiary of the programme, said teachers have been motivated by government’s initiatives to uplift their standards of living.

Mrs Uzamushakawho, a primary school teacher in Jali Sector, said teachers would donate calves when their cows deliver so as to ensure continuity of the programme.

Meanwhile, the government early this year awarded A2 teachers a salary increment of 10 per cent.

The Minister of Public Service and Labour, Mr Anastase Murekezi, said the teachers would get at least a 56 per cent salary increment over six years and other public workers between 25 per cent and 35 per cent over the same period.